The roots of the modern day computerized accounting

The double bookkeeping with entries for credits and debits was introduced in 15th century by the Franciscan monk and a mathematician Luca Pacioli, who describe the method of Venetian merchants in his book Summa de Arithmetica, Geometria, Proportioni et Proportionalità published in 1494, as a one of the first books published in the Gutenberg press. The book was soon translated and spread all over Europe, and it became the foundation for modern day bookkeeping methods.

However before Pacioli´s masterpiece on different fields of mathematics, a certain Benedetto Cotrugli, citizen of the medieval state of Dubrovnik, wrote The Book on the Art of Trading where he introduced the double entry bookkeeping. It went on print in 1573, almost hundred years after Cotrugli compiled the manuscript and Pacioli published his description on Venetian method of accounting. Before publising it circulated as a hand written document. The reason for Pacioli being held as a father of modern day bookkeeping and accounting can simply be that Cotrugli didn´t have resources for, in those times astronomically expensive, Gutenberg printing.

Pacioli gives detailed instruction on recording barter transactions as well as on several different currencies. The debits were on the left side and credits on the right side, indicating where the income came and where it was spent. Pacioli emphasized precision in recording since otherwise the business man ran into a risk to be cheated by his employers and not be on track of the situation of his business.

Much haven´t change since the Pacioli´s days in the financial management (in Finnish= taloushallinto) – the basic procedure is still the same even though it has gone through slight refinements to make the procedure suitable for the need of the industrial world´s big companies with shareholders located faraway from the actual business. The main change in accounting probably is that in the modern days much of the accounting actions are done by the computers and the whole accounting has gone from hand written ledgers into a softwares and databases.